EXHIBIT 10.61
XXXXXXX NAVIGATION LIMITED
THIRD AMENDMENT
THIS THIRD AMENDMENT (this "Amendment") is entered into as of February
16, 1999 by and among XXXXXXX NAVIGATION LIMITED, a California corporation
having its chief executive office at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000 (the "Borrower") and FLEET NATIONAL BANK, a national banking
association organized under the laws of the United States and having a head
office at Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, as the Agent and as a
Lender, BANKBOSTON, N.A., a national banking association, organized under the
laws of the United States and having a head office at Xxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, as the Syndication Agent and as a Lender,
SANWA BANK CALIFORNIA, a banking corporation organized under the laws of the
State of California and having an office at 000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxxxxxxxxx 00000, as a Lender, and ABN AMRO BANK N.V., a Netherlands
banking corporation having an office at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, as a Lender, under the Loan Agreement (as defined
below), to which reference is made for the definitions of all capitalized terms,
used, but not otherwise defined, herein.
R E C I T A L S
WHEREAS, the parties have entered into a Loan Agreement dated as of
August 27, 1997 among the Borrower, the Agent, the Syndication Agent, and the
lenders from time to time party thereto (the "Lenders"), as amended by a Letter
of Amendment dated December 17, 1997, and a Second Letter of Amendment dated
August 11, 1998 (the "Agreement"), pursuant to which the Lenders issued a
Revolving Credit Loan Commitment to the Borrower in the maximum principal amount
of $50,000,000.00;
WHEREAS, pursuant to a certain Waiver Letter dated October 27, 1998 and
a certain Supplement to Loan Agreement and Additional Waiver Letter dated
December 9, 1998 (the "December 9, 1998 Supplement"), the Borrower was granted a
limited waiver with respect to the Borrower's compliance with certain covenants
contained in the Agreement for the Borrower's fiscal quarters ended October 2,
1998 and January 1, 1999, conditional upon the satisfaction of certain specified
waiver conditions contained therein on or prior to February 16, 1999, including
inter alia the agreement of the Agent and the Lenders to further amend the
Agreement in certain respects;
WHEREAS, the Agent and the Lenders have agreed to amend the Agreement as
hereinafter set forth;
NOW THEREFORE, in consideration of the mutual benefits to be derived
from the parties' continuing relationship under the Agreement and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Borrower, the Agent, the Syndication Agent, and the Lenders
hereby agree that the Agreement is hereby amended, effective February 16, 1999
(the "Effective Date"), as follows:
1. The following defined terms appearing in Section 1.1 of the Agreement
are hereby amended in their entirety, respectively, to read as follows:
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"Commitment" means the Lenders' several commitments to make or maintain
the Loans as set forth in Section 2.1 hereof in the maximum outstanding amount
of each Lender's Pro Rata Share of $50,000,000, minus, until the fifth (5th)
Business Day following delivery of the Borrower's quarterly financial statements
pursuant to Section 5.3.3 of the Agreement and the related Officer's Certificate
as required by Section 5.3.4 reflecting Operating Income and Net Income equal to
or greater than one dollar ($1.00), a reserve of $25,000,000, as such amount may
be reduced pursuant to Section 2.6.4.
"Financing Documents" means, collectively, this Agreement, each Note,
the Security Documents, the Side Letter, the Post-Closing Letter, if any, any
Letter of Credit, any Letter of Credit Agreement, any agreement with any Lender
providing any interest rate protection arrangement and each other agreement,
instrument or document now or hereafter executed in connection herewith or
therewith.
"Net Income" means, for any fiscal period, the net after tax income
(loss) of the Borrower and any Subsidiaries for such period, excluding (i) any
extraordinary or other non-recurring gains, and (ii) any gains from the sale or
disposition of assets other than in the ordinary course of business, all as
determined on an accrual and consolidated basis in accordance with GAAP, plus,
to the extent included in the calculation of net income, any amount taken as a
one-time charge against earnings attributable to (i) the settlement of the class
action litigation described in Exhibit A attached hereto, (ii) the closing of
the Borrower's commercial marine division, or (iii) charges resulting from the
reduction in Borrower's employees resulting from the Borrower's switch to
contract manufacturing, provided that the amount of all such charges added to
net income shall not exceed $2,000,000 in the aggregate.
"Security Documents" means any and all documents, instruments and
agreements now or hereafter providing security for the Obligations and any other
Indebtedness of the Borrower or any Subsidiary to any of the Lenders, the
Issuing Lender and/or the Collateral Agent, the Agent or the Syndication Agent,
including without limitation the following documents, instruments and
agreements: any mortgages on and collateral assignments of real property
interests (fee, leasehold and easement) of the Borrower and any Subsidiary
granting Liens thereon; landlord lien waivers and consents as may be reasonably
requested by the Collateral Agent; security agreements granting Liens on all
Borrower's and any Subsidiary's fixtures and tangible and intangible personal
property; collateral assignments of Borrower's and any Subsidiary's contracts,
licenses, permits, easements and leases; collateral assignments of Borrower's
and any Subsidiary's copyrights; conditional assignments of Borrower's and any
Subsidiary's trademarks and patents; any subordination agreement; any software
escrow agreement; any guaranty; any pledge of the capital stock of any
Subsidiary; casualty and liability insurance policies providing coverage to the
Collateral Agent for the benefit of the Lenders; UCC financing statements or
similar filings perfecting the above-referenced security interests, pledges and
assignments, all as executed, delivered to and accepted by the Collateral Agent
and as may be required by this Agreement, as any of the foregoing may be amended
from time to time.
2. Section 1.1 of the Agreement is hereby further amended by the
addition of the following new defined terms to be added alphabetically thereto:
"Collateral Agent" means Fleet National Bank, in its capacity as
collateral agent under the Security Documents.
"Issuing Lender" means Fleet National Bank, in its capacity as the
issuer of Letters of Credit hereunder.
"LC Participant" has the meaning set forth in Section 2.1.1(e).
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"Letter of Credit" has the meaning set forth in Section 2.1.1(a).
"Letter of Credit Agreement" means an application and agreement for a
Standby Letter of Credit, in such form as may at any time be customarily
required by the Issuing Lender for its issuance of Standby Letters of Credit.
"Letter of Credit Fees" means the fee payable by the Borrower in
accordance with Section 2.2.2(b).
"Net Worth" means the excess of the total assets of the Borrower and
its Subsidiaries over total liabilities, as determined on a consolidated basis
in accordance with GAAP.
"Operating Income" means operating income as determined in accordance
with GAAP, plus, to the extent included in the calculation of operating income,
any amount taken as a one-time charge against earnings attributable to (i) the
settlement of the class action litigation described in that certain Disclosure
Letter dated as of February 16, 1999, (ii) the closing of the Borrower's
commercial marine division, or (iii) charges resulting from the reduction in
Borrower's employees resulting from the Borrower's switch to contract
manufacturing, provided that the amount of all such charges added to operating
income shall not exceed $2,000,000 in the aggregate.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued or deemed issued for the account of the Borrower
pursuant to Section 2.1.1 for the purpose of supporting obligations of the
Borrower or incurred in the ordinary course of business with respect to
insurance obligations and workers' compensation, surety bonds and other similar
statutory obligations, and all obligations customarily supported by standby
letters of credit and satisfactory to the Issuing Lender.
"Total Capitalization" means, as of the date of any determination, the
sum of (i) Total Funded Debt, and (ii) Net Worth.
"Total Funded Debt" means, as of the date of any determination, the sum
of (i) the principal amount of all Obligations, including, without limitation,
the Revolving Loans and the Letters of Credit, (ii) the principal amount of all
Subordinated Debt, and (iii) all Capitalized Lease Obligations of the Borrower
and its Subsidiaries.
"Unpaid Drawing" has the meaning set forth in Section 2.1.1(g).
3. The first paragraph of Section 2.1 of the Agreement is hereby amended in
its entirety to read as follows:
Section 2.1. The Revolving Credit Loans. Each of the Lenders severally
agrees, subject to the terms and conditions of this Agreement and provided no
Default or Event of Default has occurred and is continuing, to make Advances of
Revolving Credit Loans to the Borrower from time to time after receipt by the
Agent from time to time prior to the Revolving Credit Repayment Date of, and at
the times provided for in, a Request and an Interest Rate Election from the
Borrower in accordance with this Agreement, during the period commencing on the
Closing Date and ending on the Business Day immediately preceding the Revolving
Credit Repayment Date, in an aggregate principal amount at any one time
outstanding not to exceed the lesser of (i) such Lender's Pro Rata Share of the
Revolving Credit Loan Commitment less (ii) in each case, such Lender's Pro Rata
Share of the aggregate outstanding stated amount of any Letters of Credit or
Letter of Credit Agreements and any Unpaid Drawing; and
4. Section 2.1 of the Agreement is hereby further amended by the
addition of the following new Section 2.1.1 immediately following the last
paragraph thereof:
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Section 2.1.1. The Letters of Credit
(a) Subject to the terms and conditions hereof and provided no
Default or Event of Default has occurred and is continuing, at any time and from
time to time prior to the Revolving Credit Repayment Date, the Borrower may
request that the Issuing Lender issue for the account of the Borrower one or
more irrevocable Letters of Credit denominated in Dollars, and otherwise in a
form customarily used by the Issuing Lender, or in such other form as has been
approved by the Issuing Lender, in support of such obligations of the Borrower
described in the definitions of Standby Letter of Credit and any other
obligations of the Borrower that are reasonably acceptable to the Agent and the
Issuing Lender and otherwise permitted to exist pursuant to this Agreement (each
such letter of credit, a "Letter of Credit").
(b) The Issuing Lender agrees to issue (subject to the terms and
conditions contained herein) following its receipt of a request for a Letter of
Credit for the account of the Borrower one or more Letters of Credit provided
that the Issuing Lender shall be under no obligation to issue any Letter of
Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or restrain the
Issuing Lender from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over the Issuing Lender shall prohibit or request that the Issuing Lender
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular, or shall impose upon the Issuing Lender with respect to
such Letter of Credit any restriction or reserve or capital requirement (for
which the Issuing Lender is not otherwise compensated) not in effect on the date
of this Agreement, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Issuing Lender as of the date of this
Agreement and which the Issuing Lender in good xxxxx xxxxx material to it; or
(ii) the Issuing Lender shall have received notice from
any other Lender prior to the issuance of such Letter of Credit to the effect
that one or more of the conditions specified in Section 3.1.2 are not then
satisfied, or that the issuance of such Letter of Credit would violate any
provision of this Section 2.1.1.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued if the stated amount of which, when added to the aggregate amount of
all Letters of Credit and any Unpaid Drawing at such time, would exceed the
lesser of (x) $5,000,000, and (y) when added to the aggregate principal amount
of all Revolving Credit Loans then outstanding, an amount equal to the
Commitment; and (ii) each Letter of Credit shall by its terms terminate or be
terminable by the Issuing Lender on such date that would result in all drawings
thereunder, being funded pursuant to the terms thereof prior to the earlier of
(x) the date which occurs twelve (12) months after the date of issuance thereof
(although any such Letter of Credit may be extendable for successive periods of
up to twelve (12) months, but not beyond the sixth Business Day prior to the
Revolving Credit Repayment Date, on terms acceptable to the Issuing Lender), and
(y) the date which is six (6) Business Days prior to the Revolving Credit
Repayment Date.
(d) Each request for a Letter of Credit shall be made by
submission by the Borrower to the Agent of a Letter of Credit Agreement, duly
completed and executed by the Borrower and in effect at such time, no later than
five (5) Business Days prior to the proposed date of issuance of the Letter of
Credit, provided that if the express provisions of any Letter of Credit
Agreement conflict with the express provisions of this Agreement, the provisions
of this agreement shall control to the extent of such conflict. The making of
each request for a Letter of Credit shall be deemed to be a representation and
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warranty by the Borrower that such Letter of Credit may be issued in accordance
with, and will not violate the requirements of, this Section 2.1.1. The Agent
shall promptly notify, and deliver to, the Issuing Lender each such Letter of
Credit Agreement. Upon the issuance of any Letter of Credit, the Issuing Lender
shall promptly notify the Agent and each Lender of such issuance; and
(e) Immediately upon issuance of a Letter of Credit, the Issuing
Lender shall be deemed to have sold and transferred to each Lender, other than
the Issuing Lender (each such Lender, in its capacity under this subsection
2.1.1(e), an "LC Participant") and each LC Participant shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing Lender,
without recourse or warranty, an undivided interest and participation in such
Letter of Credit to the extent of such LC Participant's Pro Rata Share in such
Letter of Credit, each drawing made thereunder and the obligations of the
Borrower with respect thereto, and any security therefor or guaranty pertaining
thereto. Upon any change in the Commitment, or in the Pro Rata Shares of the
Lenders pursuant to Section 9.11 hereof, it is hereby agreed that, with respect
to all outstanding Letters of Credit and any Unpaid Drawing at such time, there
shall be an automatic adjustment to the participations pursuant to this
subsection 2.1.1(e) to reflect the new Pro Rata Shares of any assigning Lender
and its assignee or of all Lenders with respect to the Commitment, as the case
may be;
(f) In determining whether to pay under any Letter of Credit, the
Issuing Lender shall have no obligation relative to the other Lenders other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Issuing Lender under or in connection with
any Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for the Issuing Lender any resulting
liability to the Borrower, the Guarantors, the Agent or any other Lender.
(g) The Borrower agrees to reimburse the Issuing Lender by making
payment to the Issuing Lender in immediately available funds at the office of
the Issuing Lender specified for such payment by the Issuing Lender for any
payment or disbursement made by the Issuing Lender under any Letter of Credit
(each, an "Unpaid Drawing") immediately after, and, in any event on the date of
such payment or disbursement, with interest on the amount so paid or disbursed
by the Issuing Lender to the extent not reimbursed prior to 2.00 P.M. (Boston
time) on the date of such payment or disbursement, from and including the date
paid or disbursed to but excluding the date the Issuing Lender was reimbursed by
the Borrower therefor at a rate equal to the Default Rate. The Issuing Lender
shall give the Borrower prompt notice of each drawing under any Letter of
Credit, provided that the failure to give any such notice shall in no way
affect, impair or diminish the Borrower's obligations hereunder. The Borrower
hereby authorizes and instructs the Issuing Lender to charge against the
Borrower's accounts with the Issuing Lender on each date on which a payment is
due under a Letter of Credit, and on any subsequent date if and to the extent
any such payment is not made when due, an amount up to the principal, interest
and fees due and payable to the Issuing Lender thereunder and such charge shall
be deemed payment thereunder to the extent that immediately available funds are
then in such accounts. The Issuing Lender shall use reasonable efforts in
accordance with the Issuing Lender's customary procedures to give subsequent
notice of any such charge to the Borrower, but the failure to give such notice
shall not affect the validity of any such charge;
(h) In the event that the Issuing Lender makes any payment under
any Letter of Credit and the Borrower shall have failed to reimburse the Issuing
Lender under any Letter of Credit or Letter of Credit Agreement, and any
outstanding Indebtedness of the Borrower relating thereto, the Issuing Lender
shall promptly notify the Agent, which shall promptly notify each LC Participant
of such failure, and each LC Participant shall promptly pay to the Issuing
Lender in Dollars its Pro Rata Share of such unreimbursed amount in same day
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funds. If the Agent so notifies, prior to 12 P.M. (Boston time) on any Business
Day, each such LC Participant shall make available to the Issuing Lender such
payment on such Business Day, or if such notice is given after 12 P.M. (Boston
time) on any Business Day, on the next succeeding Business Day. If and to the
extent that any such LC Participant shall not have so made such funds available
to the Issuing Lender, such LC Participant agrees to pay to the Issuing Lender
forthwith on demand such amount together with interest thereon, for each day
from the date such amount was due under this subsection 2.1.1(h) until the date
such amount is paid to the Issuing Lender, at the Federal Funds Rate. The
obligations of each LC Participant under this subsection 2.1.1(h) shall be
absolute and unconditional and all payments due from each LC Participant
hereunder shall be made notwithstanding the occurrence or continuation of an
Event of Default or the failure to satisfy any condition set forth in Article 3
of this Agreement;
(i) Whenever the Issuing Lender receives a payment of a
reimbursement obligation as to which it has received any payments from the LC
Participants pursuant to subsection 2.1.1(h) above, the Issuing Lender shall pay
to each LC Participant which has paid its Pro Rata Share thereof, in Dollars and
in same day funds, an amount equal to such LC Participant's share (based upon
the proportionate aggregate amount originally funded by such LC Participant to
the aggregate amount funded by all LC Participants) of the principal amount of
such reimbursement obligation and interest thereon accruing after the purchase
of the respective participations;
(j) The obligation of each LC Participant to make payments to the
Issuing Lender with respect to any Letter of Credit and such LC Participant's
participation therein and the obligation of the Borrower to make payments to the
Issuing Lender, shall not be subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement, including, without limitation, any of the following circumstances:
(i) Any lack of validity or enforceability of this
Agreement or any of the other Financing Documents;
(ii) The existence of any claim, set-off, defense or
other right which the Borrower may have at any time against a beneficiary named
in a Letter of Credit or any transferee or assignee of any Letter of Credit
(or any Person for whom any such transferee or assignee may be acting), the
Issuing Lender, the Agent, any Lender, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transactions between the Borrower or any other Person and the
beneficiary named in any Letter of Credit);
(iii) Any draft, certificate or any other document
presented under the Letter of Credit upon which payment has been made in good
faith and according to its terms proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) The surrender or impairment of any collateral
or any other security for the Obligations or the performance or observance
of any of the terms of any of the Financing Documents;
(v) The occurrence of any Default or Event of Default; or
(vi) The failure to give notice of the issuance of any
Letter of Credit;
provided that, no LC Participant shall be obligated to pay such LC Participant's
Pro Rata Share of any unreimbursed amount arising from any wrongful payment made
by the issuing Lender under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Issuing
Lender.
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(k) Indemnification. In addition to amounts payable as elsewhere
provided in this Agreement, the Borrower agrees to protect, indemnify, pay and
save the Issuing Lender, the Agent, the Syndication Agent and the LC
Participants harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees) which the Issuing Lender, the Agent or any LC Participant (each, an
"Indemnified Party") may incur or be subject to (other than as a result of acts
or omissions of any such Indemnified Party constituting gross negligence or
willful misconduct as determined by a court of competent jurisdiction) as a
consequence, directly or indirectly, of
(i) the issuance of any Letter of Credit; or
(ii) the failure of the Issuing Lender to honor a
drawing under any Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto governmental
authority (all such acts or omissions being hereinafter referred to
collectively as "Government Acts").
(l) As among the Borrower and the Indemnified Parties, the
Borrower assumes all risks of the acts and omissions of, or misuse of any of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, subject to the provisions of
the Letter of Credit Agreements, the Indemnified Parties shall not be
responsible for:
(i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any Person in
connection with the application for and issuance of and presentation of drafts
with respect to any of the Letters of Credit, even if it should prove to be, in
any or all respects, invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole
or in part, which may prove to be invalid or ineffective for any reason;
(iii) the failure of any drawing to strictly comply with
the terms of a Letter of Credit;
(iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be indecipherable;
(v) errors in interpretation of technical terms other
than those resulting from gross negligence or willful misconduct;
(vi) any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any Letter of Credit
or of the proceeds thereof;
(vii) the non-application or misapplication by the
beneficiary of any Letter of Credit of the proceeds of any drawing under such
Letter of Credit; or
(viii) any consequences arising from causes beyond the
control of the Issuing Lender, the Agent or any LC Participant, including,
without limitation, any Government Acts.
None of the foregoing shall affect, impair or prevent the vesting of any of the
Indemnified Parties' rights or powers under this Section 2.1.1.
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(m) If, notwithstanding the provisions of Section 2.1.1(c)
hereof, any Letter of Credit is outstanding on the Revolving Credit Repayment
Date (each, a "Post-Termination Letter of Credit"), then on or prior to the
Revolving Credit Payment Date, the Borrower shall, promptly on demand by the
Issuing Lender, deposit with the Issuing Lender, with respect to each
Post-Termination Letter of Credit then outstanding, as the Issuing Lender shall
specify, cash collateral ("Cash Collateral") in an amount necessary to reimburse
the Issuing Lender for payments to be made by the Issuing Lender under any
Post-Termination Letter of Credit. Such Cash Collateral shall be held by the
Issuing Lender, as security for, and to provide for the payment of, the
obligations of the Borrower with respect to the Post-Termination Letters of
Credit. In the event that any amount of Cash Collateral remains after the
expiration of all Post-Termination Letters of Credit, so long as no Obligation
which is then due and payable is outstanding on such date, the Issuing Lender
shall return such amount promptly to the Borrower.
5. Section 2.2.2 of the Agreement is hereby amended by the addition of
the following new Section 2.2.2.4 immediately at the end thereof:
2.2.2.4 Letter of Credit Fees. The Borrower shall pay to the Agent for
the account of the Issuing Lender and each LC Participant for each Letter of
Credit issued by the Lender a per annum fee equal to the product of (x) the
stated amount thereof, and (y) the Applicable Margin then in effect for Libor
Loans, payable annually in advance on the date of issuance and each renewal date
thereof, plus, an additional amount payable on the dates specified by the
Issuing Lender and for the sole account of the Issuing Lender, such standard
fees and costs as the Issuing Lender may from time to time establish for
issuance, transfer, amendment and negotiation of each Letter of Credit and other
customary charges of the Issuing Lender with respect thereto (the "Letter of
Credit Fees").
6. Section 2.6.4 of the Agreement is hereby amended in its entirety to
read as follows:
Section 2.6.4. Permanent Reduction of Commitment. At the
Borrower's option, the Commitment may be permanently and irrevocably reduced in
whole or in part by an amount of at least $500,000 and to the extent in excess
thereof in integral multiples of $100,000 at any time; provided that (i) the
Borrower gives the Agent written notice of the exercise of such option at least
three (3) Business Days prior to the effective date thereof, (ii) the aggregate
outstanding balance of the Revolving Credit Loans plus the aggregate outstanding
amount of any Letters of Credit and any Undrawn Amounts, does not exceed the
Commitment, as so reduced on the effective date of such reduction, and (iii) the
Borrower is not, and after giving effect to such reduction, would not be in
violation of Section 2.6.3. Any such reduction shall concurrently reduce the
Dollar amount of each Lender's Pro Rata Share of the Commitment.
7. Section 2.6 of the Agreement is hereby further amended by the
addition of the following new Section 2.6.5 immediately at the end thereof:
Section 2.6.5. If at any time the aggregate principal amount
of the Revolving Credit Loans plus the aggregate outstanding stated amount of
any Letters of Credit and any Unpaid Drawing shall exceed the Commitment, the
Borrower shall immediately pay to the Agent in immediately available Dollars for
the ratable account of the Lenders the amount of such excess.
8. Section 2.8 of the Agreement is hereby amended in its entirety to
read as follows:
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Section 2.8. Use of Proceeds. The Borrower shall use the proceeds of the
Loans and obtain Letters of Credit solely for Borrower's working capital and for
general corporate purposes.
9. Section 3.1.2 of the Agreement is hereby amended in its entirety to
read as follows:
Section 3.1.2. Conditions Precedent To All Loans. The
Commitment and the obligation of each Lender to make or maintain its Pro Rata
Share of any Advance or Loan and/or the Issuing Lender to consider any request
for a Letter of Credit, are subject to performance by the Borrower of all its
obligations under this Agreement and to the satisfaction of the following
further conditions precedent:
(a) The fact that, immediately prior to and upon the making of
each Loan or issuance of any Letter of Credit, no Event of Default or Default
shall have occurred and be continuing;
(b) The fact that the representations and warranties of the
Borrower contained in Article 4, infra and in each of the other Financing
Documents, are true and correct in all material respects on and as of the date
of each Advance, Loan or Letter of Credit except as altered hereafter by actions
consented to or not prohibited hereunder. The Borrower's delivery of the Notes
to the Lenders and of each Request and Letter of Credit Agreement to the Agent
shall be deemed to be a representation and warranty by the Borrower as of the
date of such Advance, Loan or Letter of Credit as to the facts specified in
Sections 3.1.2(a) and (b);
(c) Receipt by the Agent on or prior to the Business Day
specified in the definition of Interest Rate Election of a written Request
stating the amount requested for the Loan or Advance in question and an Interest
Rate Election for such Loan or Advance, all signed by a duly Authorized
Representative of the Borrower on behalf of the Borrower;
(d) That there exists no law or regulation by any governmental
authority having jurisdiction over the Agent or any of the Lenders which would
make it unlawful in any respect for such Lender to make its Pro Rata Share of
the Loan or Advance, or purchase a participation in any Letter of Credit,
including, without limitation, Regulations U, T, and X of the Board of Governors
of the Federal Reserve System; and
(e) No Material Adverse Effect has occurred.
10. Section 5.1.10 of the Agreement ("Minimum Fixed Charge Coverage
Ratio") is hereby deleted in its entirety and the following new Section 5.1.10
inserted in its stead:
Section 5.1.10. Maximum Ratio of Total Funded Debt to Total
Capitalization. Commencing January 1, 1999, maintain a ratio of (i) Total Funded
Debt to (ii) Total Capitalization of less than .55:1.00.
11. Section 5.1.11 of the Agreement is hereby amended in its entirety
to read as follows:
Section 5.1.11. Minimum Consolidated Tangible Net Worth. (i)
Maintain a Consolidated Tangible Net Worth in an amount not less than the
Borrower's Consolidated Tangible Net Worth as of the end of the Borrower's 1998
fiscal year, minus $5,000,000, and (ii) comply with Section 8K of the Note
Purchase Agreement dated as of June 13, 1994 among the Borrower, Xxxx Xxxxxxx
Mutual Life and Xxxx Xxxxxxx Life Insurance, as the same may be amended, amended
and restated, supplemented or otherwise modified from time to time.
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12. Section 5.1.12 of the Agreement is hereby is hereby deleted in its
entirety and the following new Section 5.1.12 inserted in its stead:
Section 5.1.12. Minimum Cash Balances. Maintain at all times
on and after February 16, 1999 unrestricted cash balances in an amount equal to
or greater than (x) on any date prior to the delivery of the Borrower's
financial statements to the Agent pursuant to Section 5.3.3 and the related
Officer's Certificate as required by Section 5.3.4 reflecting Operating Income
and Net Income equal to or greater than one dollar ($1.00) for two (2)
consecutive fiscal quarters, the sum of (i) $25,000,000, plus fifty percent
(50%) or more of the aggregate principal outstanding amount of all Obligations,
including, without limitation, the Revolving Loans and the Letters of Credit in
one or more accounts maintained by the Borrower with the Agent, plus (ii) the
balance of such Obligations in one or more accounts maintained by the Borrower
with a Lender other than the Agent, and (y) thereafter (i) fifty percent (50%)
or more of the aggregate outstanding principal amount of all Obligations,
including, without limitation, the Revolving Loans and the Letters of Credit,
plus (ii) the balance of the principal amount of such Obligations in one or more
accounts maintained by the Borrower with a Lender other than the Agent.
13. Section 5.1.13 of the Agreement is hereby amended in its entirety
to read as follows:
Section 5.1.13. Minimum Quick Ratio Maintain at the end of
each fiscal quarter of the Borrower a ratio of (i) the sum of (w) cash on hand
or on deposit in any bank or trust company which has not suspended business, (x)
Cash Equivalent Investments (without duplication with clause (w) above), and (y)
net outstanding amount of accounts receivable to (ii) (x) Current Liabilities,
excluding the principal outstanding amount of any Obligations at any time
classified as Current Liabilities, of not less than 1.5:1.0. Each item described
in clauses (i) and (ii) of this Section 5.1.13 shall be calculated as of the
last day of the Borrower fiscal quarter and include only the item(s) in question
of the Borrower and its Subsidiaries on a consolidated basis.
14. Section 5.2.3 of the Agreement is hereby amended in its entirety to
read as follows:
Section 5.2.3. Acquisitions, Dissolution, etc. Acquire, in one
or a series of transactions, any properties or assets (other than the
acquisition of inventory, materials and equipment in the ordinary course of
business) or ownership interests in another Person, or dissolve, liquidate, wind
up, merge or consolidate or combine with another Person (other than mergers,
consolidations or other combinations in which the Borrower is the surviving
entity); (i) on any date prior to the delivery of the Borrower's financial
statements to the Agent pursuant to Section 5.3.3 reflecting operating income,
as determined in accordance with GAAP, and Net Income equal to or greater than
one dollar ($1.00), and (ii) as to which on or before the thirtieth (30th) day
prior to the consummation of any such acquisition, the Borrower has delivered to
the Agent a pro-forma Compliance Certificate on a consolidated basis (including
the to-be-acquired assets and any assumed liabilities or if ownership interests
are acquired, the to-be-acquired Person if such Person is to be a Subsidiary and
if not, the to-be-acquired ownership interests, all measured as set forth below
in this Section 5.2.3), which such pro-forma Compliance Certificate shall
indicate that no Default or Event of Default exists or would exist following
consummation of the permitted transaction and that the Borrower would be in
compliance with (on a consolidated basis including the to-be-acquired assets and
any assumed liabilities or if ownership interests are acquired, the
to-be-acquired Person if such Person is to be a Subsidiary and if not, the
to-be-acquired ownership interests), Sections 5.1.10, 5.1.10A, 5.1.11, 5.1.12
and 5.1.13 and Sections 5.2.8 and 5.2.9 following consummation of the permitted
transaction, including the to-be-acquired assets, Person or ownership interests
and the operating results thereof on the same basis and for the same periods as
the Borrower is measured for each such covenant, respectively.
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15. Section 5.2.4 of the Agreement is hereby amended in its entirety to
read as follows:
Section 5.2.4. Disposition of Assets. Effect any disposition
of material assets, other than (i) the disposition of assets in the ordinary
course of business, consistent with past practices, (ii) subject to Section
5.2.8, the disposition of assets not to exceed 15% of Consolidated Tangible Net
Worth in the aggregate over the period commencing on the Closing Date and ending
on August 31, 2000, the value of which assets shall be based upon the aggregate
book value of all such assets determined as of the date of the sale thereof and
prior to such disposition, and (iii) in addition to dispositions of assets
permitted under clauses (i) and (ii) of this Section 5.2.4, the disposition of
assets associated with the Borrower's transition to contract manufacturing.
16. Section 5.2.9 of the Agreement is hereby amended in its entirety to
read as follows:
Section 5.2.9. Minimum Operating and Net Income. (i) During
the period beginning with the Borrower's fiscal quarter ending March, 1999 and
ending on the fiscal quarter ending December, 1999, have a negative Operating
Income or a negative Net Income for any two fiscal quarters, and (ii) as of the
end of each fiscal quarter of the Borrower commencing with the Borrower's fiscal
quarter ending in March, 2000, have a negative Operating Income, or a negative
Net Income for the rolling four quarter fiscal period consisting of such fiscal
quarter and the three immediately preceding fiscal quarters.
17. Section 5.2.10 of the Agreement ("Dividends, Payments and
Distributions") is hereby amended by deleting clause (iii) thereof and
substituting in its stead the following new clause (iii):
(iii) on any date following the delivery of the Borrower's
financial statements to the Agent pursuant to Section 5.3.3 and the related
Officer's Certificate as required by Section 5.3.4 reflecting Operating Income
and Net Income equal to or greater than one dollar ($1.00) for three (3)
consecutive fiscal quarters, the Borrower shall be permitted to repurchase
shares of its own capital stock provided that on or before the thirtieth (30th)
day prior to the consummation of any such repurchase, the Borrower has delivered
to the Agent a pro-forma Compliance Certificate on a consolidated basis, which
such pro-forma Compliance Certificate shall indicate that, assuming the
repurchase had occurred on the last day of the most recently ended fiscal
quarter, no Default or Event of Default exists or would exist following
consummation of such repurchase and that, after giving effect thereto, the
Borrower would be in compliance with Sections 5.1.10, 5.1.10A, 5.1.11, 5.1.12
and 5.1.13 and Sections 5.2.8 and 5.2.9.
18. Exhibit 3.1.1.10 to the Agreement (Form of Compliance Certificate)
is hereby deleted and a new Exhibit 3.1.1.10 in the form attached hereto as "
Exhibit 3.1.1.10 " substituted in its stead.
This Amendment shall take effect as of the Effective Date upon
receipt by the Agent of the last item specified below (other than any item
expressly deferred or waived in writing by the Majority Lenders):
(i) this Amendment duly executed by the parties hereto;
(ii) a certificate of the Secretary or an Assistant Secretary
of the Borrower with respect to resolutions of its Board of Directors
authorizing the execution and delivery of this Amendment, and any other
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documents required to be delivered by this Amendment, identifying the officer(s)
authorized to execute, deliver and take all other actions required thereunder;
(iii) a Disclosure Letter executed by the Borrower with
respect to the representations and warranties contained in the Loan Agreement;
(iv) an Escrow Agreement and each of the Security Documents
required by the Agent in connection with the creation and perfection of a Lien
on all assets of the Borrower in favor of the Collateral Agent, for the benefit
of the Agent, the Syndication Agent, the Issuing Lender, and the Lenders as
security for the Obligations duly executed by an authorized officer of the
Borrower, (v) an Opinion of the Borrower's counsel with respect to this
Amendment and the Security Documents and the Escrow Agreement referenced in
clause (iv) above;
(v) payment to the Agent, for the ratable benefit of
the Lenders approving this Amendment, of the amendment fee in the amount of
$50,000; and
(vi) such other documents, and evidence of completion of such
other matters, as the Agent or the Required Lenders reasonably may deem
necessary or desirable.
The Borrower hereby represents and warrants to the Lenders that no
Default or Event of Default exists under the Agreement. Nothing in this Second
Letter of Amendment shall be construed to be an amendment of any other provision
of the Agreement and all of the provisions of the Agreement shall remain in full
force and effect.
This Amendment supersedes the December 9, 1998 Supplement, the terms of
which shall have no further force or effect.
This Amendment is executed as an instrument under seal and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts without regard to its conflicts of law rules. All parts of the
Agreement not affected by this Amendment are hereby ratified and affirmed in all
respects, provided that if any provision of the Agreement shall conflict or be
inconsistent with this Amendment, the terms of this Amendment shall supersede
and prevail. Upon and after the date of this Amendment all references to the
Agreement in that document, or in any related document, shall mean the Agreement
as amended by this Amendment. Except as expressly provided in this Amendment,
the execution and delivery of this Amendment does not and will not amend, modify
or supplement any provision of, or constitute a consent to or a waiver of any
noncompliance with the provisions of the Agreement, and, except as specifically
provided in this Amendment, the Agreement shall remain in full force and effect.
This Amendment may be executed in one or more counterparts with the same effect
as if the signatures hereto and thereto were upon the same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the Borrower, the Agent, the Syndication
Agent, and the Lenders in accordance with Section 9.5 of the Agreement, has
caused this Amendment to be executed and delivered by their respective duly
authorized officers as an instrument under seal as of the Effective Date.
BORROWER:
XXXXXXX NAVIGATION LIMITED
By: /s/ Xxxx X. Xxxx
Xxxx X. Xxxx
Treasurer
AGENT:
FLEET NATIONAL BANK
By:/s/ Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Vice President and Senior
Relationship Manager
SYNDICATION AGENT:
BANKBOSTON, N.A.
By: /s/ Xxxxxxx X. Xxxx
Print Name Xxxxxxx X. Xxxx
Title: Vice President
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LENDERS:
FLEET NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Vice President and Senior
Relationship Manager
BANKBOSTON, N.A.
By: /s/ Xxxxxxx X. Xxxx
Print Name Xxxxxxx X. Xxxx
Title: Vice President
SANWA BANK CALIFORNIA
By:
Print Name
Title:
ABN AMRO BANK N.V.
By: /s/ Xxxxxx X. Xxxxxxx
Print Name Xxxxxxx X. Xxxxxxx
Title: Group Vice President
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